Taxable value of residential property or holiday property in the event of fire or natural damage
If your residential property or holiday property has been damaged or destroyed in fire or natural damage, reducing its market value, this may impact the taxable value.
It’s the value of the property at the end of the income year that must be stated in the tax return.
Specific information if you:
- own a completely damaged or destroyed residential property or holiday property
- own a partially damaged residential property or holiday property
- have had the value of the property reduced due to natural damage without your property being directly damaged
- have received compensation for the loss of a primary dwelling, and have all or part of the compensation amount in your account at the end of the payment year
- A primary dwelling is the residential property that you own and use as your permanent home. Generally, it is the residential property where you have your address registered in the National Population Register at the end of the year. You can only have one primary dwelling.
- A secondary dwelling is a residential property that you own that is not your permanent residential property at the end of the income year. For example: Rental properties, commuter properties, and residential properties that are used as holiday homes are secondary dwellings.
- A residential property that you’ve moved out of before the start of the income year due to a breakup is also considered a secondary dwelling.
- A residential property can be the primary dwelling of one owner, but the secondary dwelling for another owner. For example: A residential property is owned by a child and their parents together. Only the child lives in the residential property. The child’s ownership share in the residential property will be calculated according to the rules for primary dwellings, while the parents’ ownership share will be calculated according to the rules for secondary dwellings.
Damage to primary dwelling
If your primary dwelling is completely damaged and it’s not possible to live there, you must change the tax return so that the information is correct.
How to do it
- change the property type from primary dwelling to plots of land. If it’s not possible to build on the property, you must change the property type to other real property, and
- state the property’s market value at the end of the income year.
The taxable value is calculated automatically.
You do not need to send us proof for this, but you must be able to provide supporting documents if we ask you to.
If your primary dwelling is partially damaged, resulting in a market value lower than the Tax Administration’s calculated market value, you can request that the residential property is valued according to the documented market value.
You must change your tax return
- state the property’s market value at the end of the income year.
The taxable value is calculated automatically.
The estimated market value of the residential property is NOK 5,000,000. After the damage, you’ve received a new appraisal or valuation of the property. You can now provide supporting documents showing that the market value has been reduced to NOK 4,000,000.
You must change your tax return and request that the residential property be valued at NOK 4,000,000. The taxable value is calculated automatically in the tax return.
If natural damage has occurred in your local area without directly affecting your residential property, it may still affect the taxable value of the residential property.
If the market value of your primary dwelling is lower than the calculated market value, you can request that the taxable value of the residential property be calculated according to the documented market value.
You must change your tax return
- state the property’s market value at the end of the income year.
The taxable value is calculated automatically.
The estimated market value of the residential property is NOK 5,000,000. After the damage, you’ve received a new appraisal or valuation of the property. You can now provide supporting documents showing that the market value has been reduced to NOK 4,000,000.
You must change your tax return and request that the residential property be valued at NOK 4,000,000. The taxable value is calculated automatically in the tax return.
The main rule is that the compensation amount is taxable as wealth. In the payment year, there is an exemption to the rule if you’ve received compensation for the loss of your primary dwelling and you have not had time to buy a new residential property before the end of the year.
The compensation amount you have in your account will not be taxed in full, but at the same rate as for a primary dwelling.
The rule only applies to compensation for the loss of your primary dwelling and only to the amount you have in your account at the end of the payment year.
The rule does not apply to interest earned on the compensation.
If you’ve bought, inherited or received a new primary dwelling, the compensation amount in your account will be taxed in full as wealth.
The purpose of the rule is to prevent increased net wealth tax for persons who have lost their home and who have not had time to buy a new residential property before the turn of the year.
How to enter this in your tax return in the year you receive the payment
- change so that you are not taxed on wealth for both the primary dwelling and the compensation amount.
- The taxable value of the part of the compensation amount you have in your account at the end of the payment year is calculated at the same rate as for the primary dwelling.
You’ve received NOK 4,000,000 in compensation for the loss of your primary dwelling. You’ve not had time to buy a new residential property. The compensation amount is in your account at the end of the payment year and is pre-filled in the tax return.
In the tax return, you can change the amount so that the entire compensation amount is not considered taxable wealth. The compensation amount can be reduced by using the same rate as for the primary dwelling.
The rate for this primary dwelling is 25 percent, and the value is set at NOK 1,000,000 (4,000,000 * 25/100 = 1,000,000)
You’ve received NOK 12,000,000 in compensation for the loss of your primary dwelling. You’ve not had time to buy a new residential property. The compensation amount is in your account at the end of the payment year and is pre-filled in the tax return.
In the tax return, you can change the amount so that the entire compensation amount is not considered taxable wealth. The compensation amount can be reduced by using the same rate as for the primary dwelling.
The rate for this primary dwelling is 25 percent up to NOK 10 million, and then 70 percent of what exceeds NOK 10 million and the value is set to NOK 3,900,000 ((10,000,000*25/100) + (2,000,000 *70/100) = 3,900,000).
Damage to secondary dwelling
If your secondary dwelling is completely damaged and it’s not possible to live there, you must change your tax return.
How to do it
- change the property type from secondary dwelling to plots of land. If it’s not possible to build on the property, you must change the property type to other real property, and
- state the property’s market value at the end of the income year.
The taxable value is calculated automatically.
You do not need to send us proof for this, but you must be able to provide supporting documents if we ask you to.
If your secondary dwelling is partially damaged, resulting in a market value lower than the Tax Administration's calculated market value, you can request that the residential property be valued according to its documented market value.
You must change your tax return
- state the property’s market value at the end of the income year.
The taxable value is calculated automatically.
The estimated market value of the residential property is NOK 5,000,000. After the damage, you’ve received a new appraisal or valuation of the property. You can now provide supporting documents showing that the market value has been reduced to NOK 4,000,000.
You must change your tax return and request that the residential property be valued at NOK 4,000,000.
If natural damage has occurred in your local area without directly affecting your residential property, it may still affect the taxable value of the residential property.
If the market value of your secondary dwelling is lower than the calculated market value, you can request that the taxable value of the residential property be calculated according to the documented market value.
You must change your tax return
- state the property’s market value at the end of the income year.
The taxable value is calculated automatically.
The estimated market value of the residential property is NOK 5,000,000. After the damage, you’ve received a new appraisal or valuation of the property. You can now provide supporting documents showing that the market value has been reduced to NOK 4,000,000.
You must change your tax return and request that the residential property be valued at NOK 4,000,000.
The taxable value is calculated automatically in the tax return.
If you have all or part of the compensation amount for loss of a secondary dwelling in your account at the end of the payment year, this amount is taxable wealth.
Damage to holiday property
If your holiday property is completely damaged, you must change your tax return.
How to do it
- change the property type from holiday property to plots of landand enter the property's market value at the end of the income year.
If it’s not possible to build on the property, you must:
- change the property type to other real propertyand enter the property's market value at the end of the income year.
The taxable value is calculated automatically.
You do not need to send us proof for this, but you must be able to provide supporting documents if we ask you to.
If your holiday property is damaged and you can prove that the taxable value is too high, you can reduce the taxable value. The taxable value of a holiday property must not be higher than 30 percent of the market value.
You must change your tax return
- state the property’s market value at the end of the income year.
The taxable value is calculated automatically.
You do not need to send us proof for this, but you must be able to provide supporting documents if we ask you to.
The taxable value of your holiday property is NOK 1,200,000. Your holiday property has been partially damaged in a flood. The damage has not been repaired, and you’ve had an appraisal of the property that shows that the market value is NOK 3,000,000.
The taxable value must not be higher than 30 percent of the market value. 30 percent of NOK 3,000,000 is NOK 900,000.
You can reduce the taxable value by entering the market value of NOK 3,000,000 in your tax return. The taxable value is automatically calculated at NOK 900,000.
If natural damage has occurred in your local area without directly affecting your holiday property, it may still affect the taxable value of the holiday property.
If you can prove that the taxable value is too high, you can reduce the taxable value. The taxable value must not be higher than 30 percent of the market value.
You must change your tax return
- state the property’s market value at the end of the income year.
The taxable value is calculated automatically.
You do not need to send us proof for this, but you must be able to provide supporting documents if we ask you to.
The taxable value of your holiday property is NOK 1,200,000. Due to landslides in the area, the area's popularity has decreased, and you’ve had an appraisal of the holiday property that shows that the market value is NOK 3,000,000.
The taxable value must not be higher than 30 percent of the market value. 30 percent of NOK 3,000,000 is NOK 900,000.
You can reduce the taxable value by entering the market value of NOK 3,000,000 in your tax return. The taxable value is automatically calculated at NOK 900,000.
If you have all or part of the compensation amount for loss of a holiday property in your account at the end of the payment year, this amount is taxable wealth.